Colombian on-demand delivery startup Rappi confirmed Tuesday afternoon an investment of “up to $1 billion” from SoftBank. The raise was done at a pre-money valuation of $2.5 billion, according to a Bloomberg report.
Last month, we reported that SoftBank Group Corp. (SBG) had unveiled plans for a $5 billion SoftBank Innovation Fund, or what it described as “the largest-ever technology fund focused exclusively on the fast-growing Latin American market.” The funding marks the first investment from SoftBank’s new innovation fund and was made alongside SoftBank’s Vision Fund. SoftBank Group and the Vision Fund will each invest up to $500 million in Bogota-based Rappi, according to a release by the company.
The investment also marks the largest technology financing to date in a Latin America-based company, according to Rappi.
Subscribe to the Crunchbase Daily
Since its inception in 2015, Rappi has now raised a total of about $1.4 billion—most recently, bringing in around $200 million in a Series D last August that took it to unicorn status, according to the startup’s Crunchbase profile. Yuri Milner’s DST Global led that round, which included participation from existing investors including Sequoia Capital and Andreessen Horowitz (a16z).
The chart below highlights recent funding rounds for Rappi.
According to the Latin American Venture Capital and Private Equity Association (LAVCA), Rappi focused on delivering beverages and first, and has since expanded into meals, groceries, tech goods, and medicine. The company also offers a cash withdrawal feature, allowing users to pay with credit cards and then receive cash from one of Rappi’s delivery agents. To help keep costs efficient, the company’s fleet of couriers use only motorcycles and bikes, according to LAVCA.
Rappi says that last year, it “expanded the number of products delivered by seven times, and registered a monthly growth of 20 percent” in the seven countries where it operates: Brazil, Colombia, Mexico, Argentina, Chile, Uruguay and Peru.
Simón Borrero, Sebastian Mejia, and Felipe Villamarin launched the company in 2015, graduating from Y Combinator the following year. A16z’s initial investment in July 2016 was the Silicon Valley firm’s first investment in Latin America, according to LAVCA.
Marcelo Claure, SoftBank Group’s COO, CEO of SoftBank Group International and CEO of Innovation Fund, said of the company:“Rappi’s founders have a bold vision to create the premiere multi-service ‘super-app’ for Latin America, improving the lives of millions in the region. In less than four years Rappi has become one of the fastest growing start-ups in Latin America. This rapid growth demonstrates the immense opportunity in the Latin American region.”
In general, the Latin American region has seen a surge in VC investment and increased interest from global investors, which you can read more about it here.
Editorial note: The funding round was confirmed after this piece was published. We have revised the headline and the article to reflect this change.
Illustration: Li-Anne Dias